Indian steel manufacturers continue to hike their prices in May ’21, bridging the widening gap between global and domestic market prices.
AM/NS India announced an increase of INR 2,500 in its HR-plates prices at the beginning of the month. With this the revised list price of HR-plate stands at around INR 65,000/t exy- Mumbai (exclusive of GST @ 18%).
SteelMint’s benchmark assessment for HR-plates(base grade IS 2062, E 350) stands at INR 65,500-66,000/t(exy-Mumbai), up by INR 1,000-1,500/t($14-20) on the week. Last week’s prices were at INR 64,000-64,500/t(exy-Mumbai). The prices mentioned above are exclusive of GST @ 18%.
However, the domestic market activities have suffered due to the partial lockdowns announced across provinces amidst the second phase of COVID-19 taking hold of the nation.
“The lockdown in Delhi region has been extended until 10th May, hence, the market activities shall remain slow and continue to weigh on the HR-plate demand in the region,”shared a credible trade market participant.
Challenges faced due to the lockdown:
- Logistical barriers with restricted market activity hours in partially locked-down zones.
- Working with skeletal employee counts.
- Critical natured projects are under developmental activities, others halted due to low labour availability.
- Restriction on material and human movement in high-risk zones.
- Diversion of oxygen for medical aid from both manufacturing and downstream industries.
HR Plate demand may rebound due to the following factors:
1. Upcoming projects in the Construction sector-
a) NCL Industries project worth INR 105 crore-NCL Industries Board gave in-principal approval to setup 110 t/hour cement grinding and packing unit at Line III-Phase-2 at Mattapalli, Telangana. The estimated cost of the project is around INR 105 crore and is expected to be completed in eighteen months from the date of its financial closure.
b) The Centre sets target on road work worth INR 15 lakh crore-The Centre is giving utmost priority to the development of infrastructure and has set a target of road construction worth INR 15 lakh crore in the next two years. The government is permitting 100% FDI in the road sector.
c) NHIDCL floats tender worth INR 442 crore-The National Highways & Infrastructure Development Corporation (NHIDCL) has invited bids for the construction of the Kishtwar bypass in the Union Territory of Jammu & Kashmir. The estimated value of the project is INR 441.19 crore with a completion period of two years.
d) AP approves INR 1,000 crore for various projects-The Andhra Pradesh Council of Ministers has approved a slew of new development projects, including the INR 1,000 crore Vizag Beach Corridor. This project aims to build a hospitality district with world-class accommodation facilities (beach resorts and hotels) for visitors, along the corridor. The 19.66 km Bheemili-Bhogapuram stretch will be a six-lane access controlled greenfield expressway road for friction-free movement.
2. Government schemes in the Energy sector-
a) Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme-The Indian government under this scheme focuses on the installation of 15,000 standalone solar pumps in Haryana in the first year of the scheme.
b) Adani Green Energy raises FY ’22 CapEx-The company being one of the largest renewable energy producers with an installed capacity of 13,990 megawatts (MW) has raised its CapEx plans for FY ’22 to INR 15,000 crores. The company had spent INR 8,500 crores in FY ’21, SteelMint learned from the recent media reports. The manufacturer has a power generation portfolio across wind, solar and hybrid power projects and intends to increase it to 25 gigawatts (GW) by the year 2025.
Outlook
With the market swirling between rising steel prices and reduced demand amidst the ongoing lockdown in major HR-plates market it would be interesting to see if the market can absorb the recent hikes in the trade segment.
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